Enterprise Portfolio MANAGEMENT isn’t Application Portfolio Optimization

The portfolio based approach that has been pioneered by companies like Troux and which is now part of the standard lexicon by which organizations discuss their enterprise information technology asset base is creating an incredible lens through which to understand the organization.

It is useful however to distinguish between optimizing your current portfolio and building processes and governance that help you sustain a healthy portfolio. For example application portfolio optimization (APO) which targets redundancy and other inefficiencies in the the existing portfolio does not fix the systemic problem. This portfolio approaches treat the NOW problem. It may save you millions an dit may get you a raise, but the benefits while real are for TODAY. They don’t fix the governance and business process issues that got you into the situation you are in today. Doing that means remaking the decision making processes that got you where you are today. You need to understand the value landscape.

Thanks as always for reading my blog, I hope you will join the conversation by commenting on this post.

If you liked this post, please consider subscribing to this blog and following me on twitter @jmillsapps. I regularly give talks via webinar and speak at events and other engagements. If you are interested in finding out where to see me next please look at the my events page on this blog. If you would interested in having me speak at your event please contact me at events@joshmillsapps.com.

If you are interested in consulting services please go to MB&A Online to learn more.

Getting the most out of your performance management system

OLYMPUS DIGITAL CAMERA

I think that performance management and performance management systems should be leveraged by organizations to spur higher performing actions and activities as opposed to just using them as sort of a rear view mirror to understand how you did. I think there are probably many ways to do it but I want to talk a little bit about our approach and kind of what I believe works best for us. When you look at anything you’re trying to improve you have to understand the factors of:

  • What factors drive performance
  • What pieces of information do I need in order to understand how its performing now
  • How it may perform in the future

You need a mechanism to get that information in. You need some type of assessment of those things; a way to surface the information about what’s the state of that information at a given moment in time. So I think I use the term assessment because it signifies what you’re really trying to get at here. You can spend a lot of time talking about metrics, measures, key performance indicators (KPIs), and things like that but I’m just going to use the blanket term assessments. I’m trying to say that what we’re trying to do is understand a specific thing that we’re trying to improve. There may be a lot of informational elements that go into understanding it but that is what that assessment is supposed to help us tease out.  What that should do is give us at a specific point in time a really good understanding of the factors that contribute to success or failure at that given point in time.

Oftentimes you need more than just the state of that particular thing to really understand performance or particularly, if you’re looking at lots of those types of things. If you’re looking at a portfolio I use investments all the time because it’s a pretty easy concept to grasp. A lot of people have 401ks, mutual funds, and things like that and they understand that those things are comprised of lots of smaller investments. It’s performance across all those things that contributes to their eventual financial performance.

If you were to assess your portfolio at a specific point in time, it might be as simple as a statement that you get from the company that manages your portfolio. It’s probably going to tell you a little bit about the individual components of the portfolio that makes up your retirement account and that’s a slice in time view that you get. That is of course dependent on what company you go thru and what level of detail you’ve requested. You may get things all the way down into very detailed financial reporting that’s supposed to be indicative of specific companies that are part of your portfolio and that is great for the day that you receive that information. Unfortunately we all know that a day, a week, a month later, the market is completely different.  Things can change immensely in a very short period of time as we’ve seen several times in the last ten years. Instances where we’ve gone from incredible market performance to extraordinarily disappointing market performance in what seems like the blink of an eye and you know the same is true for any organization. So one of the things you need to keep in mind is context.

For many of the companies that were a part of that portfolio, not a lot of things changed inside some of those companies when the market went south but it certainly affected their performance in the market. This despite the fact that maybe they weren’t a part of the industry segment or market segment that was bringing down the market as a whole. Their performance was affected by it so hopefully that is a way to look at context.

There’s a lot of information that you might need to help you make good decisions that’s maybe not directly related to the status of the particular things that you are trying to measure. If you miss that part of it you’re going to miss a lot of the things that inform your understanding of the assessment and make it so that you can make good decisions.  So I think context is enormously important and often overlooked. You need be looking for the pools of information that help make the information that you’re gathering more meaningful.

The last of the things that I think is really important is real time situational awareness.  It’s great to have that assessment, that in depth understanding of the item, and it’s great to understand the context around it but a lot times being able to translate that into things that improve performance means being able to communicate and collaborate across organizational boundaries; both inside the organization and outside the organization. It means being able to collaborate to use that information to make better decisions in a group or team environment. It means being able to understand that information because you see the changes as they occur. You’ve identified the factors that are important to you and you have a mechanism for ensuring that you become aware when certain thresholds change or when there’s activity on a particular item.  I think that situational awareness piece is also often overlooked and incredibly important.

Now oftentimes the most stressed component of all of the things that I’m talking about is the assessment piece.  You’ll have organizations that will invest enormous amounts of money in a point in time assessment. I’m not saying that those are necessarily a bad thing to do but I think that if you want to drive real long term performance you need to be able to have both. You have to combine that with context and with some type of communication and collaboration capability that allows you to take advantage of all of it. Then I think the final things is the business intelligence component; the piece that rolls all of that together so that you can use all of it in a way that is seamless to your organization.

  • Do you have a way to pull context together, the actual assessment information, and then manipulate, share, and leverage that information across your organization so you can really foster change?

I’m curious how other people manage this. I know it’s a big space with lot of layers in it but I think the value chain that runs from the assessment, to the context, to the communication and collaboration workflow component that enables it are incredibly important as a whole. You really have to think about it as not those individual pieces because that’s how traditionally the vendor community addresses it. They have a piece that addresses how you do assessments. There’s a piece that does communication and collaboration and there’s a piece that helps manage data and does business intelligence across various elements of it. I think it’s really important to figure out how you’re going to work with those as a cohesive whole or to choose things that allow you to work as a cohesive whole across that entire value chain.

Thanks as always for reading my blog, I hope you will join the conversation by commenting on this post.

If you liked this post, please consider subscribing to this blog and following me on twitter @jmillsapps. I regularly give talks via webinar and speak at events and other engagements. If you are interested in finding out where to see me next please look at the my events page on this blog. If you would interested in having me speak at your event please contact me at events@joshmillsapps.com.

If you are interested in consulting services please go to MB&A Online to learn more.

Unlocking the full value from a change initiative

unocking blog 6-18

I had another conversation the other day about the value landscape.  I’ve talked about this before and I wanted to touch on it a little bit again because I think it’s applicable to almost any type of project that you do, especially around business intelligence and anything within the analytics realm. I’m going to use Troux for this example. Troux, for those of you that don’t know, is an enterprise portfolio management software. It’s got a lot of specific use cases that help organizations get a fairly rapid return on investment. So an organizational command will acquire the Troux tool. They’ll get involved in specific programs to achieve their goals and pretty soon they’ve made this great progress. What happens as time goes on is they sort of lose a little bit of steam. The low hanging fruit that was there at the beginning goes away and then they start to wonder, “Well how come I’m not still getting the same benefit that I was getting before?”

I think that one of the things that organizations run into is that they haven’t thought a lot about how to take that information and use it to make a lot of incremental returns. What I mean by that is one of the big use cases organizations have for Troux is to look at their IT portfolios and figure out

  • Where do I have redundancy
  • Where do I have things that I can consolidate

So at the beginning there’s this huge value for a lot of organizations because it’s a unique way of looking a problem they haven’t seen previously. They get all this value really rapidly and then they start to slow down because they use the tool to make these big decisions but they’re not embedding that intelligence into their ability to make smaller decisions. That intelligence they use for the big decisions can also help them be able to make decisions farther down within their organization. It will get them that same return on investment only distributed out amongst more folks. This happens all the time.

I’m using Troux as an example because it’s easy to talk to but I think almost any business intelligence activity that goes on within an organization has this problem. It’s usually the impetus, some big problem that you’re trying to solve, some particular thing you’re trying to get insight into and there’s this big bang value proposition that goes out. Then unless the organization takes and figures out how to leverage that information within their processes, they stop getting that same big return. I think this is one of the biggest missed opportunities that we have within modern organizations.

We’ve got one of the most highly educated work forces that we’ve ever had and we’ve got all these capabilities to do advanced analytics and yet we haven’t really taken advantage of any of that to the degree that we could. In this example of having analytics that maybe get used by an executive but they’re never driven down into the business processes and to users who are probably quite capable of leveraging those to make decisions. They’re either unavailable or the processes don’t dictate that they leverage them. There’s this huge opportunity to capture value that is currently not being executed on and it’s simply because we’ve brought the capability into the organization to make better decisions but we haven’t built our processes to take advantage of that. I think it’s something that as you go through large change initiatives you need to really look at:

  • What are the phases of  this
  • How is this going to drive value in our organization
  • Where and when am I going to get ROI
  • Really think about what happens when I’m in my post implementation world

I wrote a blog post awhile back about living in a post-Troux world but I think it’s just as applicable to any of these large systems that you implement that are supposed to give you greater insight into what you’re doing. You have to build it into your processes if you want to get all the value from it.

Thanks as always for reading my blog, I hope you will join the conversation by commenting on this post.

If you liked this post, please consider subscribing to this blog and following me on twitter @jmillsapps. I regularly give talks via webinar and speak at events and other engagements. If you are interested in finding out where to see me next please look at the my events page on this blog. If you would interested in having me speak at your event please contact me at events@joshmillsapps.com.

If you are interested in consulting services please go to MB&A Online to learn more.